Definitions of factor abundance and factor intensity

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Reference no: EM13854707

Suppose Canada has 100 workers and 160 units of capital whereas Mexico has 100 workers and 70 units of capital. Also suppose that each unit of product A requires 4 workers and 1 unit of capital to produce, whereas each unit of product B requires 5 units of capital and 2 workers.

(i) Apply the definitions of factor abundance and factor intensity to sort countries and products.

(ii) What would you expect the pattern of trade to be between Canada and Mexico? Explain your reasoning.

Reference no: EM13854707

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